Is Waaree Renewables’ strong order book an indicator of future growth?

India aims to increase its non-fossil energy capacity to approximately 450-500 GW by 2030 and meet half of its energy needs from renewable sources. The strategy aims to reduce the economy’s carbon intensity by 45% by 2030 and ultimately achieve net-zero emissions by 2070.

As a result, the renewable energy sector is poised to make a significant contribution not only to meeting the country’s carbon reduction goals, but also to meeting the expected growth in electricity demand over the next decade.

Concerns about climate change and the drive for sustainable practices have led to a significant increase in demand for solar solutions as the world transitions to renewable energy sources.

As the world recognizes the importance of sustainable energy, Waaree Renewable Technologies Limited shines as a prime example of innovation and commitment to creating a more environmentally conscious tomorrow.

The stock achieved an impressive return of approximately 1,152% in just one year. Over five years, the stock price soared 61,859%. The company recently announced its third quarter FY24 results, which showed a 158% increase in profit after tax to Rs 64.46 billion and a 338% increase in revenue to Rs 73.88 billion.

Let’s take a closer look at the article to understand the reasons for this incredible growth.

Corporate Overview of Waaree Renewable Technologies

Afternoon Regeneration Techniques, commonly referred to as Waaree, is a prominent figure in the field of renewable energy, particularly known for his focus on solar energy solutions. Since its inception in 1989, the company has embarked on an incredible journey and has become a pivotal player in India’s renewable energy sector.

Waaree’s business operations span the entire solar value chain, from manufacturing solar modules to providing comprehensive solar energy solutions. Its product portfolio includes solar modules, inverters, water pumps and solar lighting solutions, serving a variety of residential, commercial and industrial sectors.

With a global presence, Waaree has supplied solar modules with a total capacity of more than 6 gigawatts to various destinations around the world. Its products are sold in 68 countries, highlighting the company’s important role in promoting the global uptake of clean and sustainable energy practices.

Some of its notable clients include industry giants such as Reliance Industries, Bharat Petroleum, Aditya Birla Group, Adani, Jindal Steel and Power, etc., highlighting Waaree’s extensive reach and reputation in the market.

Business divisions of Waaree Renewable Technologies

EPC contract

Waaree Renewable Technologies Limited is actively involved in Engineering, Procurement and Construction (EPC) contracts. In this segment, the company carries out comprehensive projects responsible for the entire life cycle of solar energy systems. This includes design, material procurement, and construction of the solar power plant.

Operation and maintenance

Waaree’s Operations and Maintenance segment includes the ongoing care and management of solar energy systems. Once a solar project is operational, the company provides maintenance services to ensure optimal performance and longevity.

sale of power

In the power sales segment, Waaree Renewable Technologies Limited is engaged in producing and selling solar power to customers. The company owns solar power plants or facilities that generate electricity and enters into contracts to sell this power to end users or utility companies.

Let us understand the revenue mix of two major segments: EPC contracts and power sales.

The company derives majority of its revenue from EPC contract contribution, which amounts to approximately 97% of total revenue, while power sales contribute approximately 3%.

EPC contract revenue increased 131.80% in FY23, while power sales revenue decreased 32.72% YoY.

finance Afternoon Regeneration Techniques

In FY 2023, Waaree Renewables Technologies saw significant growth in its revenue, surging 116% to reach ₹351 crore compared to ₹162 crore in FY 2022. After analyzing four years from FY2020 to FY2023, the company recorded a compound annual growth rate (CAGR) of 288%.

At the same time, net profit also increased significantly, growing by 511% from ₹9 crore in FY2022 to ₹55 crore in FY2023.

In FY23, Waaree Renewables Technologies maintained favorable financial metrics with return on equity (ROE) of 65.09% and return on invested capital (ROCE) of 62.74%.

What’s next for Waaree renewable technologies?

powerful spell book

The company has an outstanding order book of over 749 MW and has completed orders of over 473 MWpas, according to its third quarter fiscal 2024 report.

Some of the large orders recently won by the company in Q3FY24 and Q2FY24 are 70 MW capacity ground-mounted solar power project, 4.27 MW capacity rooftop solar power project, 78 MWp capacity ground-mounted solar power project and 73.92 MWp capacity solar power project. power project.

Embracing the green hydrogen revolution

While Waaree Renewable Technologies Limited’s core business is centered around solar power projects, the company recognizes the enormous potential of green hydrogen as a key component of the global energy transition. India’s ambitious goal to produce 5 million tonnes of green hydrogen by 2030 presents an attractive opportunity for Waaree.

The company has already secured pilot projects from public sector entities to showcase its capabilities in this emerging area. In a forward-thinking move, WRTL is entering the green hydrogen space by establishing a 1 MW green hydrogen plant.

By actively exploring the path to the green hydrogen space, Waaree Renewable Technologies is positioning itself as a forward-thinking company ready to capitalize on the burgeoning demand for clean energy solutions.

This strategic move is not only consistent with the company’s commitment to sustainability, but also highlights its vision to diversify into complementary renewable energy sectors.

Promising growth outlook driven by industry tailwinds

India’s solar power sector is poised for remarkable growth, driven by the government’s ambitious target of achieving 206 GW by 2027 and 280 GW by 2030.

This surging demand, combined with the country’s determination to transition to a low-carbon economy, provides a fertile environment for Waaree Renewable Technologies Limited.

With an impressive outstanding order book of 749 MW peak and a robust pipeline of 9 GW, the company is strategically positioned to capitalize on the industry’s upward trajectory.

With proven expertise in executing solar projects and providing innovative solutions, Waaree Renewable Technologies has established itself as a key player driving sustainable growth in India’s renewable energy landscape.

conclusion

In conclusion, Waaree Renewable Technologies has demonstrated remarkable growth driven by innovative solutions and a commitment to sustainable energy. With strong order volumes, a foray into the green hydrogen space, and favorable industry trends, the company appears well-positioned for continued success.

What are your thoughts on Waaree Renewable Technologies Limited’s future prospects in the rapidly evolving renewable energy sector?

Written by Narine Surya

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